Computer Business Review

The annexation of the Crimea and the military conflict in the eastern part of Ukraine will have a negative effect on general consumer purchasing power, study confirms.

Russia is focusing on next-generation network expansion and data subscribers to drive growth in its telecoms sector, while Ukraine's telecoms sector deteriorates due to the ongoing war and political unrest in Crimea.

These are the findings of two new reports published by Pyramid Research.

The Russia Country Intelligence Report provides an executive-level overview of the telecommunications market in Russia today, with detailed forecasts of key indicators up to 2018.

The report states that, with a revenue of $42.8bn, or 2.0% of GDP, the telecom services market in Russia was the largest in Central and Eastern Europe in 2013.

Over the next five years, Pyramid Research expects total market revenue in Russia to grow at a CAGR of 1.7% to reach $46.5bn in 2018. This growth rate will slightly exceed the average rate of 1.5% for the CEE region from 2013 to 2018.The report also concluded that data services in both the fixed and mobile segments will be the driving force behind market growth, which will be further boosted by pay-TV uptake.

A separate study by Pyramid Research, focusing on Ukraine's telecoms industry, found that the telecoms market in the country generated an estimated $5.2bn in 2013, 3.3% more than in 2012, with the mobile voice segment contributing 45.4% of total revenue.The study, titled 'Ukraine: Strong Data Demand to Mitigate Effects of Conflict, Currency Devaluation,' asserted that, over the next five years, market revenue in the Ukraine is expected to decline at a CAGR of -2.4%, to $4.7bn in 2018. The expected revenue decline is attributed to the current political and economic difficulties in the country.

The annexation of the Crimea and the military conflict in the eastern part of the country will have a negative effect on general consumer purchasing power in addition to network disruptions and a currency devaluation, Pyramid Research concluded.